Merger with CDS - Statement

FLARE GROUP PLC
25 October 1999


                     Flare Group plc

Flare  Group  has agreed to merge its Bricesco  Kiln  and
Thermic Dryer manufacturing businesses with the interests
of  the independent, Stoke-based companies, Ceramic Kilns
Limited and Ceramic Drying Systems Limited (together CDS)
with effect from 29 October 1999.

The effect of the transaction is to dispose of the rights
to  the  name  and  the intellectual  property  of  these
businesses for an initial consideration of £450,000.  The
consideration will be used in part to pay down  debt  and
in part to invest in new product development elsewhere in
the Group. Up to a further £1,050,000 will become payable
by  way  of  a  royalty of up to 5% on  future  sales  in
consideration   of  the  licence  to   CDS   of   certain
trademarks.  These  marks revert to Flare  if  the  total
royalties paid have not reached £1,050,000 by 31 December
2006.

CDS  will  have  an exclusive licence to  use  the  names
Bricesco  and  Thermic  kilns  and  dryers.  Flare   will
continue to incorporate such kilns and dryers into  their
turnkey  and  process linking contracts for  the  ceramic
industry.

As  a result, Flare expects to reduce the overall cost of
future  contracts and to stop the losses that  have  been
incurred  in the manufacturing activity in recent  years.
In  the  year  to  31  December  1998,  these  activities
generated a loss before interest of £1.5m.

For further information, please contact :

Flare Group plc                             01782 847718
Tony Brierley

Buchanan Communications                     0171 466 5000
Tim Anderson / Isabel Petre